Current setup
Silver prices are under pressure alongside gold this Thursday as fears of persistent US inflation and expectations that US monetary policy will remain restrictive after the 28 October Fed decision weigh on precious metals. Spot silver price is seen reading at $56.61, down 3.5% in early London trading.
Silver tends to react more strongly in the current environment because it serves as both an industrial raw material and a precious metal. Silver’s high beta makes it highly sensitive to changes in US Treasury yields, monetary policy expectations, and business conditions in key manufacturing industries.
Higher US bond yields typically strengthen the dollar, as investors must convert to US dollars to participate in bond markets. This makes non-yielding silver more expensive for non-US buyers and less attractive to interest-seeking flows.
Conversely, lower US bond yields make silver cheaper for non-US buyers (China is the world’s largest industrial base), which typically increases the demand for the white metal, especially among industrial buyers.
Silver Price: Macro Drivers
1. Fed policy and Treasury yields
The Fed’s 27–28 October meeting remains the primary macro driver. Markets will seek confirmation of a rate hike at the December meeting; if the Fed does not raise rates, the rate statement and comments by Fed Chair Kevin Warsh will also be closely monitored for hawkish rhetoric and language pointing to continued upside risks to inflation. US bond yields are trading lower this Thursday , but remain above the key 5.00% benchmark. Hawkish language and a jump in bond yields are negative for silver.
2. Industrial Demand
Silver is an essential raw material in renewable energy, solar, electronics, and phone manufacturing. Industrial demand is an additional price determinant. Manufacturing conditions provide some insight into the demand status of the white metal.
A stronger industrial outlook and PMI manufacturing data add a high-beta status to silver, helping it outperform gold during a broader metal price recovery. The reverse also holds: silver price declines can outpace gold price drops if data point to weak industrial demand and slowing global growth.
3. Oil-driven Inflation
Brent crude is trading well above the $100 mark , at $112.39 as of writing, complicating the inflation outlook and capping any expectations of monetary policy easing. Currently, inflationary concerns from higher oil prices and a stronger dollar, driven by high US bond yields, are a stronger catalyst than industrial demand and safe-haven interest. This is why silver price is currently under pressure.
Silver Price: Forecast Scenarios
Bull case: A decline in US Treasury yields could drive a pullback in silver prices. This would support a sustained move above $58.00, which exposes upside targets at $59.70 and $62.54 (3 July high) or higher.
Base case: Silver price has fallen quite a bit. It’s normal to expect some consolidation as traders weigh the next Fed expectations against industrial demand and the energy-price situation. This could keep the XAG/USD asset between $55.00 and $57.00.
Bear case: A break below the current support around $55.37 would expose downside targets at $53.25 and potentially $50.10 (21 November 2025 low) if US bond yields remain elevated or global industrial sentiment deteriorates significantly. A hawkish Fed decision also strengthens this case.
Technical Outlook
Bullish above $69.35 | Neutral $55.37–$69.35 | Bearish below $55.37
The 57.11-55.37 support zone is critical to the direction of the price action. If price fails to break either of these boundaries in the near term, this could form the short-term range. Otherwise a breakdown of the 55.37 support ushers in the 53.25 price mark (12 November 2025 high) as the initial downside target. A continued decline brings in the 50.10 low of 21 November 2025 into the picture.
Fig 1: Silver price (daily chart) showing key price levels (snapshot: 22 October 2026)
On the flip side, a break of the 57.11 upper consolidation boundary unlocks access to target sat 62.53 (3 July 2026 high) and potentially the lower boundary of the 67.28-69.35 price zone. Only when the upper limit of this range is uncapped can we see a further recovery opportunity, with 71.20 serving as the primary target.
The post Silver Price Down 3.5% As $112 Oil Price Drives Fed Hawkish Expectations appeared first in UK on InvestingCube .
